By Christian Mullins
What if I told you the most developed society on Earth (according to the United Nations) was in trouble?
As a nation, the United States is having a tough time economically, with the collapse of the mortgage market, Fannie Mae and Freddie Mac, AIG, several large banks and even a few credit unions, not to mention a net job loss for the year and an ever shrinking (in value anyway) stock market, and the ripple effect is far from through. Except this isn’t about the United States.
There’s an old expression, told in many different ways, stating that no matter how bad off your situation is, someone else is going through something far worse.
Iceland, an affluent island nation of 320,000, is facing problems the United States couldn’t fathom. Their Prime Minister, Geir Haarde, warned on Monday that their nation faced bankruptcy. The cause is much like that of every other country facing financial problems: The banks are struggling, creating a ripple effect throughout the economy. The difference is that in Iceland, the assets of the nation’s banks totaled 10 times that of the country’s GDP last year, and now their debts total several times that of the nation’s economy.
Their third largest bank has been nationalized (their second largest is in receivership), the krona (their currency) has plummeted in value, and inflation is running at a robust 14%. Many retail stores are even afraid to reorder stock until everything on the shelves has been sold for fear of inflationary losses.
The only shining light (if you could call it that) in all of this is, because of the weak krona, more tourists are expected to visit a more affordable Iceland than in previous years.
While it’s irresponsible to suggest that the problems within the United States are irrelevant because the situation in Iceland is worse, it’s prudent to remember that this is not merely a national concern, but a global one. Doom and gloom sells, and America has their fair share of it right now, but perspective goes a long way to realizing that as bad as it is for many individuals and businesses here, it’s much worse elsewhere.
October 17, 2008 at 11:17 am |
I’ve read that when the countries/islands were named Iceland and Greenland should have had their names reversed. It just depended on the time of year and where the explorers landed that they got named this way. Any place the produced Bjork must have something going for it, so thanks for the idea that it might be a neat and inexpensive place to visit.
October 17, 2008 at 7:02 pm |
I’ve heard it’s beautiful there, though I’ve never been. I’ve also heard that the people are friendly, and the vast majority speak English (convenient since not too many people speak Icelandic).
They are in negotiations with several European nations to shore up their economic problems, but they aren’t out of the woods yet. There’s also a bit of politics going on there with Russia offering aid, though I think it’s best for an international politics blog to address that.